Evaluation of the business efficiency of commercial banks

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study aims to evaluate the impact of the COVID-19 pandemic on the business efficiency of 15 listed commercial banks in Vietnam, from 2016–2023. We use qualitative analysis methods and T-test models in SPSS software to compare the efficiency of indicators before and after COVID-19. Research results have shown that the operating picture of the banking industry has a rare bright spot when the business efficiency of the entire banking industry has grown, in which state-owned commercial banks have a significant gap with the group of private commercial banks, thanks to better total asset size and risk buffer. The authors find that the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) is the state-owned bank with the most stable and best performance in the research sample and observation period, while the Military Commercial Joint Stock Bank (MBB) is the best private bank. In the post-COVID-19 period, from 2021–2023, the business performance of commercial banks in Vietnam has grown in return on equity (ROE), net interest income (NII), and profit after tax (PAT). At the same time, capital adequacy ratio (CAR) has no difference, showing that the financial safety level of commercial banks remains stable. Thereby, the authors propose four solutions to commercial banks and recommend four policy implications to the management agency.

Keywords: Efficiency, Return, Profit, Banks, Return on Equity, Return on Asset, Capital Adequacy Ratio, Vietnam, COVID-19

Authors’ individual contribution: Conceptualization — P.T.H.N; Methodology — B.T.N; Software — P.T.H.N; Validation — B.T.N; Formal Analysis — P.T.H.N; Investigation — B.T.N; Resources — B.T.N; Data Curation — P.T.H.N; Writing — Original Draft — P.T.H.N; Writing — Review & Editing — P.T.H.N and B.T.N; Visualization — P.T.H.N; Supervision — B.T.N; Project Administration — B.T.N; Funding Acquisition — P.T.H.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C02, C67, G21, O33

Received: 21.05.2024
Revised: 13.08.2024; 08.05.2025; 04.07.2025
Accepted: 28.07.2025
Published online: 31.07.2025

How to cite this paper: Nhung, P. T H., & Ngoc, B. T. (2025). Evaluation of the business efficiency of commercial banks. Risk Governance & Control: Financial Markets & Institutions, 15(3), 115–126. https://doi.org/10.22495/rgcv15i3p9